On the face of it, share buy-backs are a way of increasing shareholder value for cash-rich companies. But playing this like a rule of thumb can be an unwise decision, and it appears that the latest buy-back announced by information technology leader Tata Consultancy Services (TCS) falls in that category.
While Rs 18,000 crore may not be a big amount for a company that has a market capitalisation of Rs 14.4 lakh crore, it is precisely for that reason that investors may not be impressed. By its own admission, TCS would be denting its equity capital by just 1.08 percent. This would barely have an effect on the earning-per-share of the company.

